12-11-2020, 06:34 PM
VICOM has been expanding its payout ratio in the past few years - from 80% of NP in 2015 to >100% of NP in the past 3 years. Of course, it can do that (pay >100% of NP) due to its prior years of conservative payout and also its high quality FCF.
IMHO, I feel a "safe bet" when we based it on dividends, is really a safe bet (ie. the odds are for you), only when the payout ratio is low. That is not really the case for VICOM. A "safe bet" on VICOM, is therefore when prices drop instead.
That said, it is a boring business that forms part of a portfolio. Frees one's time to do other things in life or spend time digging other companies that gives "high return of brain power".
IMHO, I feel a "safe bet" when we based it on dividends, is really a safe bet (ie. the odds are for you), only when the payout ratio is low. That is not really the case for VICOM. A "safe bet" on VICOM, is therefore when prices drop instead.
That said, it is a boring business that forms part of a portfolio. Frees one's time to do other things in life or spend time digging other companies that gives "high return of brain power".